Why you need a substance

In this article, we will consider why you need a substance and what its role is for your company. Substance provides businessmen with the opportunity to receive much more tax preferences in the country of registration of your company.

In fact, substance is an indicator of the real presence of a company in a particular country. Substance demonstrates to us that a subsidiary that takes part in transactions and other trading operations with the main company actually has the functions to perform such operations. The real activity of the company should be conducted with all the ensuing functions and operational activities, which does not have the sole purpose of obtaining tax optimization.

Let’s look at the signs according to which we can attribute the company to clearly real. A company with substance has the following signs:

• own office and leased office (which is confirmed by the lease agreement);
• the presence of their own personnel who are hired in accordance with local law;
• salary payments to staff;
• the presence of a secretary, director or manager;

Why you need a substance, first of all, it is necessary for banks, which are increasingly checking their potential customers when the latter intend to open a bank account. Financial institutions require the provision of documents confirming the legal basis for office rent and staff work. In the initial analysis of the client, banks also pay attention to the availability of telephony and the facts of the provision of tax and financial statements.

However, as we already understood, this option leads to an increase in company expenses. We cannot downplay the importance of having a substance, but we strongly recommend that you choose in this case a jurisdiction where the costs of maintaining your office will be minimal.

Our company experts recommend recommending starting a business in Cyprus. Due to its developed legislation and the integration of EU norms into national legislation, your business will be under reliable legal protection. Cyprus is no longer an offshore company, but tax legislation still remains attractive for business. Along with the opening of the company, we offer you to take the substance.

The lawyers of our company are professionals with experience in the financial and legal sectors of the EU countries (and the rest of the world). With our help, obtaining substance for your company will not be difficult for you. We will prepare the necessary papers and provide clients with all the necessary advice.

For more advice, contact us at the contacts listed on the site